Article

How two QSRs leverage Walmart locations for brand exposure

Walmart customers are similar to Checkers and Philly Pretzel Factory customers in their quest for value, speed and convenience.

July 23, 2014

As the largest U.S. retailer, there’s no question Walmart provides a unique opportunity for brand exposure, and two QSRs in particular are taking advantage of the brand's popularity. Checkers and Philly Pretzel Factory have both recently announced development plans to expand their footprints inside of Walmart stores nationwide. Executives from both chains admit their objective with this specific nontraditional footprint is to gain brand exposure and to offer customers even more speed and convenience.

Checkers

Checkers signed a deal with Twin Towers Trading Site Management in the fall of 2013 to initially open in three Walmart locations. Although the brand is located on some campuses and in some airports, this agreement marked the chain’s first venture into a retail space, according to Jennifer Durham, VP of Franchise Development.

Since 2005, TTTSM has been opening national restaurant chains, such as Subway, Papa John's, Sonic and Auntie Annie's, in 1,851 Walmart stores nationwide.

"The wonderful thing about partnering with Walmart is that you're guaranteed pedestrian traffic of 65,000 and above," said George Leviton, VP of TTTSM.

Durham said Checkers' and its sister chain Rally’s main priorities are speed and convenience, driven by their signature double drive-thru model. By setting up shop in Walmart, it fits those objectives by bringing the restaurants to guests where they shop daily.

"It makes our brands more convenient and serves them in one stop," Durham said.

The restaurants' presence also benefits Walmart employees, who enjoy having a restaurant onsite, she said, and Checkers is able to leverage the partnership further by selling its French fries in the stores’ freezer cases.

Checkers targeted Walmart because its customer base is similar.

"It was critical to us to partner with the right retail partner and the Walmart customers are value conscious, hard-working and diverse – a perfect match," she said.

Checkers’ non-traditional formats offer the same kitchen, but also include a dining room for guests to enjoy their meal. Walmart units include the brand’s full menu.

Durham said franchisees have seen a great return investment from the initial Walmart openings, and the company plans to extend the opportunity with Walmart "as well as other retail venues" that may fit.

Philly Pretzel Factory

The Philly Pretzel Factory is currently in 10 DMAs with Walmart and it has allowed the brand to enter new markets, such as Richmond and Hampton Roads, Va. The partnership started in 2012 as a test location in Shippensburg, Pa. According to PPF President Marty Ferrill, Walmart at the time was searching for a healthy snack option for its retail spaces.

The pretzel brand works directly with Walmart to identify the right opportunities for both parties. A significant benefit for PPF is the reduced footprint, Ferrill said. A typical location is about 1,200 square feet, and for its Walmart locations, that is adjusted down to about 400 square feet.

"When we first began entering Walmart locations we needed to adjust our equipment to fit the space, but we weren’t willing to compromise on quality. Over the years we have been able to implement smaller, more economical ovens that continue to perform at the highest levels in the industry," Ferrill said.

The smaller space does make it difficult for PPF to carry as many specialty products, but all core products are offered.

Like Checkers, Ferrill believes PPF fits well within the Walmart landscape because they’re both value-based companies. Additionally, having a Walmart presence has helped sell franchisees, he said.

"It also helps the retail side because of the volume of people that are exposed to our logo and our great products. Exposure is key in our industry and we are always looking for new and interesting ways to deliver our products," Ferrill added.

Other key benefits from the partnership include lower payroll and cost of goods. There are also other subtleties in the agreement that can’t be shared publically, Ferrill said.

"We’ve made sure that the partnership is mutually beneficial for Walmart as well as Philly Pretzel Factory franchisees," he said.

PPF currently has approximately 30 more of these locations in development.

"We have had great success with our Walmart locations, so at this point, we will entertain any and all Walmart opportunities that are presented to us or that we feel would make a great Philly Pretzel Factory location," Ferrill said.